B.p. Marsh & Partners Plc · LSE:BPM
B.p. Marsh & Partners — FY2012 Earnings Presentation
30 slides from B.p. Marsh & Partners's earnings presentation, May 2012
Slide 1: Final Results Year to 31 January 2012
B.P. Marsh & Partners Plc Final Results Year to 31 January 2012 Brian Marsh OBE, Chairman Jonathan Newman, Group Finance Director Camilla Kenyon, Investment Director Daniel Topping, Investment Director May 2012
Slide 2: Overview
Overview Niche Venture Capital provider focused on minority investments in financial services businesses, typically taking an equity stake of between 15% and 45% Geographic focus on UK, but also considers opportunities in EU and North America Established in 1990 with funding of £2.5m – 31 inve
Slide 3: Financial Highlights – Year Ended 31 January 2012
Financial Highlights – Year Ended 31 January 2012 NAV of £50.1m (31 July 2011: £48.5m, 31 January 2011: £46.5m) NAV per share 171p (31 July 2011: 166p, 31 January 2011: 159p)* Currently trading at a 48.2% discount to NAV (at close 28 May 2012) Consolidated profit after tax £3.6m (31 July 201
Slide 4: Other Key Developments – Cash Position
Other Key Developments – Cash Position Directors' Loan £1.25m of loans were used to fund follow-on investment in Besso in March 2011 £0.25m was repaid in February 2012 from working capital, and the remainder will be repaid in full in June 2012 from the sale of shares in Hyperion The £4.325m
Slide 5: Performance: Net Asset Value (NAV)
Performance: Net Asset Value (NAV) 48.5 50.1 50 46.5 43.9 44.2 40.6 40 30 £ Millions 22.1 20 8.7 10 4.7 2.5 0 31st Jan 31st Jan 31st Jan 31st Jan 31st Jan 31st Jan 31st Jan 31st Jan 31st July 31st Jan 90 95 99 05 07* 09 10 11 11 12 YEAR ENDED YEAR ENDED SIX MONTHS ENDED NET OF DEFERRED TAX * NB: The
Slide 6: 2007-2012: Resilient Net Asset Value (NAV)
2007-2012: Resilient Net Asset Value (NAV) Source: Datastream 6
Slide 7: Investments at January 2012
Investments at 31 January 2012 Consolidated Cash Flow Investment Activity Cost of Fair market Equity % Year Movement investment value initially in year to (£’000) 31.01.12 invested 31.01.12 (£’000) (£’000) Amberglobe Limited Business sales platform 98 98 49% 2008 - Besso Insurance Group Limited Insu
Slide 8: Key Portfolio Valuation Movements in Year – Hyperion Insurance Group Ltd
Key Portfolio Valuation Movements in Year – Hyperion Insurance Group Ltd Valuation increase of £4,520,000 due to: Revenue increased by 21% to £87.3m in 2011 EBITDA £18m, up 45% on 2010 Margin increased from 17% to 21% Continued strong growth forecast for 2012 as new acquisitions and teams
Slide 9: Post Balance Sheet Events - Hyperion Insurance Group Ltd
Post Balance Sheet Events - Hyperion Insurance Group Ltd Disposal of stake in CFC Underwriting Limited (“CFC”) In April 2012 Hyperion reached agreement to sell its majority stake in CFC to a consortium of private investors and the management team, subject to FSA approval Partial disposal of sh
Slide 10: Key Portfolio Valuation Movements in Year – Besso Insurance Group Ltd
Key Portfolio Valuation Movements in Year – Besso Insurance Group Ltd Valuation increase of £216,000 due to: Major restructuring in 2011, post the Wells Fargo exit Delivered on-going revenues of £24.4m and EBITDA of £1.1m Whilst rates continue to stay soft in US wholesale, through restructur
Slide 11: Post Balance Sheet Events – Besso Insurance Group Ltd
Post Balance Sheet Events– Besso Insurance Group Ltd Exercise of Call Option In March 2012 Besso exercised the Call Option agreement entered into with the Group in April 2011 for 4% of Besso Stock Following this the acquired shares were cancelled and new shares of an equivalent number were iss
Slide 12: Case Study – US Risk (UK) Limited
Case Study – US Risk (UK) Limited In June 2010 BP Marsh acquired a 30% stake in the parent company of Oxford Insurance Brokers Ltd for £1.4m Following our investment the Company has supported management in their growth aspirations to: Strengthen core areas of focus (North America and worldwide
Slide 13: Balance Sheet Events – US Risk (UK) Ltd
Key Portfolio Valuation Movements in Year & Post Balance Sheet Events – US Risk (UK) Ltd Valuation increase of £288,000 due to: Revenue grew 8% to £6.1m in 2011 Revenue forecast to grow > 15% in 2012 Increased revenue expectations due to new producers hired in 2011 Modest valuation increas
Slide 14: Key Portfolio Valuation Movements – LEBC Holdings and Summa
Key Portfolio Valuation Movements in Year – LEBC Holdings Ltd and Summa Insurance Brokerage SL LEBC Holdings Limited (“LEBC”) Valuation decrease of £202,000 due to: Revenue grew by 7.5% in 2011 to £10.2m, of which 40% was recurring Small operating profit due to restructuring of business Smal
Slide 15: Other Key Developments – Investment Opportunities
Other Key Developments – Investment Opportunities 83 prospective new investments received in the year to 31 January 2012, this was compared to 90 in the year to 31 January 2011 Sourcing of new opportunities: Long-term introducer relations Active networking BVCA membership Referrals from
Slide 16: Minority Investor Protections
Minority Minority Investor Investor Protections Protections BP Marsh’s position is well protected and portfolio investments are actively monitored. It has the following investor safeguards in place: Board meetings are held frequently and at least every three months; Timely management accounts in
Slide 17: Adding Value
Adding Value Representation at Board level Guidance on strategy and development Market intelligence and contacts to develop customer base / strategic alliances Provision of follow-on funding Identify exit path and potential acquirers 17
Slide 18: Exit Strategy
Exit Strategy Exit considered on entry Patient development to achieve full earning potential Recognise and act on opportunistic situations Deal size favours acquisition by large financial services firms 18
Slide 19: Other Key Developments – Outlook
Other Key Developments – Outlook Continue to seek investment opportunities in high growth businesses Continue to seek attractive realisation opportunities for our current portfolio Climate of continuing economic uncertainty necessitates a prudent approach Focus on maximising value in existin
Slide 20: Summary
Summary Summary NAV proving to be resilient even in uncertain economic conditions 90% of portfolio by value in insurance broking or related activities BP Marsh is not subject to the limitations of a closed fund, such as asset redemption pressures Current cash position of £4.8m Net cash aft
Slide 21: Appendices
Appendices Management Team Board Members Current Portfolio Financials Major Shareholders Contacts 21
Slide 22: Management Team
Management Team 50 years’ experience in insurance broking and Executive Chairman underwriting. 1979-1990 was chairman of the Nelson Hurst & Marsh Group. More than 30 years’ experience Brian Marsh OBE building, buying and selling financial services businesses particularly in the insurance sector. Cha
Slide 23: Board Members
Board Members Over 17 years’ experience in the financial services Non-Executive Director industry. Having joined the Company in 1994 she was made Managing Director in March 2002 before Natasha Dunbar becoming a Non- Executive Director in 2008. Natasha is still involved in aspects of the operational
Slide 24: Current Portfolio
Current Portfolio Amberglobe Limited - 49% March 2008 invested in Amberglobe Ltd Start-up, financing ex-managing director of Dipford plc Company is a business sales platform, providing valuation and negotiation services for the sale of SME businesses in the sub £3m sector Besso Insurance Group
Slide 25: Current Portfolio cont.
Current Portfolio cont. Paterson Squared LLC - 22.5% Founded in September 2008 after its separation from Paterson Martin Limited The team use sophisticated modelling techniques to assess risk, with a view to providing counter-party risk and transaction advice Portfolio Design Group International
Slide 26: Consolidated Balance Sheet
Consolidated Statement of Financial Position Consolidated Balance (IFRS) at 31 January 2012 Sheet Audited Unaudited 6 Audited Year to months to Year to 31 Jan 2012 31 July 2011 31 Jan 2011 £’000 £’000 £’000 Tangible assets 14 24 33 Investments at fair value 50,624 48,692 47,143 Debtors / Loans recei
Slide 27: Consolidated Income Statement (IFRS)
Consolidated Statement Consolidated of Comprehensive Income Income Statement (IFRS) (IFRS) at 31 JanuaryIncome 2012 Statementto 31 July 2007 Audited Unaudited 6 Audited Year to months to Year to 31 January 31 July 2011 31 January 2012 £’000 2011 £’000 £’000 Gains on Investments (Realised and Unreali
Slide 28: Consolidated Cash Flow
Consolidated Statement of Cash Flows (IFRS) Consolidated Cash Flow at 31 January 2012 Audited Unaudited 6 Audited Year to months to 31 Year to 31 Jan 2012 July 2011 31 Jan 2011 £’000 £’000 £’000 Net cash from / (used by) operating activities 215 (51) 114 Taxation - - - Purchase of Property, plant an
Slide 29: Key Shareholders
Key Shareholders Directors Brian Marsh OBE - 59.1% Natasha Dunbar - 4.9% Major Shareholders (>3%) SVM Asset Management Limited Henderson Global Investors AXA Framlington The Stephen Crowther Trust Sanlam Asset Management (Ireland) 29
Slide 30: Contacts
Contacts Contacts B. P. Marsh & Partners Plc 2nd Floor 36 Broadway London SW1H 0BH Telephone: 020 7233 3112 Website: www.bpmarsh.co.uk Nominated Adviser & Broker Panmure Gordon & Co Telephone: 020 7459 3600 Financial PR Redleaf Polhill Telephone: 020 7566 6720 Email: bpmarsh@redleafpolhill.com 30